Standard Chartered to pay damages to customer for 'extortion'

The District Consumer Disputes Redressal Forum said raising undue credit card bill of Rs 74,000 and putting the customer's name in defaulters' list due to which he could not avail the services of any other bank was illegal and asked Standard Chartered to desist from such activities in future.

The forum noted that the bank had raised the bill despite reaching a settlement with its customer five years ago.

"It is very strange that after five years of settlement of the account of the two credit cards and receipt of settled amount, the bank again demanded Rs 74,004 as outstanding amount against the credit cards.

"Such demand amounts to extortion of money from complainant by the bank. It cannot compel customer to make more payment after receipt of the settled amount five years back," said the consumer forum bench of B B Chaudhary.

The orders came on a complaint by city resident Alok Aggarwal who had taken two credit cards from the Standard Chartered Bank. He said the bank did not send the monthly statements of the credit cards and started levying charges and interest illegally.

The bank had, in 2004, reached a settlement with Aggarwal for full and final resolution of outstanding amount on payment of Rs 1,954 after which use of two credit cards was discontinued.

However, to his utter surprise, his request for a credit card of American Express Bank in March 2009 was rejected on the ground that a huge amount was overdue on him as reported in the Credit Information Bureau (India) Limited (CIBIL) in their consumer credit information report.

Aggarwal contacted the bank but he was asked to pay Rs 74,004 to get his name deleted from defaulter list of CIBIL.

He also alleged that bank officials visited his office to force him to make the payment and in the process insulted him in the presence of his employees and others.

The consumer forum said the bank's act amounted to extortion and directed it to pay Rs one lakh for causing harassment and mental agony and Rs 10,000 as litigation cost.

"The act of the bank, is highly objectionable and against principle of natural justice and also against legally concluded settlement. The bank had no business to ask the complainant to make payment to get his name deleted from the list of defaulters with the CIBIL," the forum said.